Council at impasse over fire assessment options

August 20, 2013

Cape Coral City Council has one week to decide what direction it wants to go regarding a proposed fire service assessment.

That may be a tall order after the board stalemated on a variety of options presented during Monday's regular city council meeting at City Hall. The elected board split, with three seemingly in favor of one option, two in favor of another, while two others were opposed to the new levy regardless of option.

The matter was brought as an addendum to Monday's regular city council meeting budget; the council had been asked by City Manager John Szerlag for direction on how to proceed with the fiscal year 2014 budget.

This was necessitated after the city's bond counsel for its controversial fire service assessment, Bryant Miller Olive, revised its opinion regarding the city's plan to tie a property tax decrease with the assessment, essentially a new tax.

The council was presented four options. The first two, which were first presented during the budget workshop last Wednesday, had no millage reduction and 29 percent "cost recovery" for the fire service assessment, and a .25 millage reduction with a 38 percent assessment, Options A and B, respectively.

Those options would produce the $150 per household additional tax levy Szerlag said was essential to obtain the funds needed to make capital improvements, such as pave roads and replace vehicles while also achieving what the city is calling "financial diversity."

The diversification plan called for a new tax on electric bills; a new tax, the assessment, to fund a percentage of operation costs for the fire department; and a property tax reduction, originally 1 mil, or $1 for every $1,000 of assessed valuation.

The plan was to raise $20 million more in tax revenue, with the impact being $150 more per "average" household.

Option C, which Councilmember Derrick Donnell championed at the workshop, had no new fire services assessment while keeping the new public service tax on electric bills.

Option D also had no assessment, but had a .25 millage rate decrease.

Option C would cost an average household $65 more, with Option D producing an estimated $40 more in revenue for the city per household. These options could be implemented in the event to bond validation for the fire assessment is denied.

The last two options lowered the increase in revenue to the city to an estimated $6.7 million and $4.2 million, respectively, each less than the $20 million increase originally proposed.

The final two options would sharply curtail the city's ability to make capital improvements, Szerlag said before bringing up a number of city department heads to tell council exactly what they were.

IT director John MacLean said nearly everything in the department needed to be replaced.

"If any switches go out, it will mean down time. We need about $1.2 million in new equipment, $800,000 of which is critical," MacLean said.

Meanwhile, the police department reported that 253 out of 330 cars are model year 2006 or older, with 28 having more than 100,000 miles on them, with one having at least 140,000 miles.

During council comment, things got a little heated, even after Donnell apologized for an outburst Wednesday.

For one, council couldn't get a consensus. Half the council was in favor of Option B, though one member, Marty McClain, was absent.

"If the validation fails, we have Option B dictated to us. We can't wait any longer. If we don't fix this, we'll have blight," Councilmember Kevin McGrail said. "To delay is to play chicken needlessly."

However, Option C had its supporters in Donnell and Rana Erbrick, who said with validation coming late anyway, delivering diversification a year later won't necessarily bankrupt the city.

However, those two camps found common ground in its disdain for the third camp, the Mayor John Sullivan and Chris Chulakes-Leetz position, which, from the beginning, has been opposed to any tax increase.

"For four years, how do you think we should solve the infrastructure problem? What's your solution?" Councilmember John Carioscia said.

"You have to make a choice or we have a deadlock. A, B, C, or D? Put your big boy pants on," Erbrick said.

"I choose option E and we don't raise taxes," Sullivan answered. "Adding taxes will hurt the economy. Many people are still out of work or underemployed."

"I can't choose an option for something I didn't support. To do that would be hypocritical. I need to be consistent," Chulakes-Leetz said.

Erbrick said Monday night has been a synopsis of the last two years on council and that the event of last week made Wednesday's workshop not a real workshop.

"Unfortunately, we have a mayor who doesn't know how a real workshop works. We should have discussed this then," Erbrick said. "Again, it's up to the six of us to do our best to fix it because we have two who don't want to fix the woes of the city."

"We have four who support Option B. I can certainly advance it and I can give council a supplemental sheet if they want to modify the numbers," Szerlag said. "That would incorporate the $65 PST and a $110 FSA because it would also have the quarter mil reduction, effective immediately."

The council could get real time solutions when the ordinance and resolution will go to a final vote next Monday. Bryant Miller Olive and Burton & Associates are expected to attend.